Servicemens Readjustment Act of 1944
The Servicemens Readjustment Act (better known as the GI
Bill of Rights) provided government funds for education for all
veterans returning from World War II. The educational costs included
tuition, lab fees, books, health insurance and supplies. Students
received up to $1,440 depending on the number of dependents, per
year above tuition  this is the equivalent of $11,856
in 1994 dollars.

In 1988,
the Congressional Subcommittee on Education and Health of the
Joint Economic Committee produced an analysis of how much the
country benefited from the GI Bills investment in education.
The following are the major results of the report:

How Much
Did the Government Invest in Veterans Education?
By approximately 1952, the government had spent $14 billion (1952
dollars) on educational and job training benefits for 7.8 million
veterans. Of these funds, $7 billion was spent on college and
graduate school for 2.2 million GIs.

How Much Did the Government and Economy Get Back for this Investment?
The first benefit from this investment was increased growth in
the economy. The report calculated that about 40 percent of those
who took advantage of the GI Bill would not otherwise have been
able to attend college. The extra output those people created
in the economy amounted to $35.6 billion (1952 dollars after factoring
out inflation) over the next 35 years.

$12.8 Billion in Increased Tax Revenues from the GIs
The additional education for the returning GIs led to higher wages
and more taxes for government. To be conservative, the report
looked at how much extra taxes were paid by the 40 percent who
would not have gone to college without the GI bill. Those extra
taxes came to $12.8 billion (1952 dollars). As the chart below
shows, the GI Bill was a tremendous investment for the United
States. For every dollar invested in the GIs’ higher education,
the government and economy received at least $6.90 in return.

Return
on Investment in GI Bill of Rights

In
1952 Dollars

In
1994 Dollars

Cost
for Sending GIs to College

$7.0
billion

$38.7
billion

Extra
National Economic Output Due to Extra Education

$35.6
billion

$196.7
billion

Extra
Federal Tax Revenues

$12.8
billion

$70.7
billion

Total
Benefits

$48.4
billion

$267.4
billion

Amount
Returned for Every $1 Invested

$6.90

Sources:
“A Cost-Benefit Analysis of Government Investment in Post-Secondary
Education Under the World War II GI Bill,” Subcommittee on Education
and Health of the Joint Economic Committee, December 14, 1988 and
Labor Institute and Public Health Institute, Corporate Power and the
American Dream: Toward an Economic Agenda for Working People. New
York: The Apex Press, 1997.